GBP/USD retreats from weekly tops on upbeat US data

   “¢   Weekly jobless claims/core PCE price index betters market expectations.
   “¢   USD bearish pressure eases after mostly positive US economic data.

The GBP/USD pair trimmed some of its early strong gains to mid-1.3300s and quickly retreated around 20-25 pips from weekly tops post-US economic data.

Against the backdrop of resurgent US Treasury bond yields, the US Dollar trimmed some of its early steep losses and got a minor lift from today’s data that showed a larger than expected decline in the initial weekly jobless claims and stronger than expected core PCE price index for April.  

Meanwhile, personal income recorded m/m growth of 0.3% for April but the big positive surprise came from an unexpected rise in personal spending, which climbed 0.6% m/m during the reported month and prompted some long-unwinding trade around the major.

Despite the pull-back, the pair has managed to hold above the mid-European session dip to the 1.3300 neighborhood but remains on track to post steep declines for the second consecutive month.  

Traders now look forward to speeches by influential FOMC member – Atlanta Fed President Raphael Bostic and the Fed Governor Lael Brainard for some impetus later during the New-York trading session.  

Technical outlook

Mario Blascak, FXStreet’s own European Chief Analyst writes: “Technically, the GBP/USD is in corrective mode jumping back up above 1.3300 level with 1.3380 representing 61.8% Fibonacci retracement of the uptrend starting at 1.2770 and peaking at 1.4377 being the next target on the upside. Should GBP/USD pullback lower, the 1.3300 round big figure should act as the immediate support.”